Die with Zero

1. Maximize your positive life experiences, not just your wealth

When you're facing your mortality, we suddenly start thinking, What the hell am I doing? Why did I wait this long?

Life is finite. Most people go through life as if they had all the time in the world, delaying gratification indefinitely. This approach is shortsighted and can lead to a life of regret. Instead, focus on maximizing your positive life experiences rather than just accumulating wealth.

Experiences over possessions. Research shows that spending money on experiences makes us happier than buying material goods. Experiences provide:

• Lasting memories
• Personal growth
• Social connections
• Unique stories to share

Balancing present and future. While it's important to plan for the future, don't sacrifice too much of your present happiness. Aim to strike a balance between:

• Enjoying life now
• Saving for later experiences
• Preparing for basic needs in retirement

2. Invest in experiences early for compounding memory dividends

Because of the memory dividend, those experiences bring some rate of return, just as investments in financial instruments do—sometimes a ridiculously high rate of return.

Memory dividends compound. Experiences not only provide immediate enjoyment but also create lasting memories that continue to bring happiness long after the event. This "memory dividend" compounds over time, much like financial investments.

Benefits of early investment in experiences:

• More time to enjoy and reflect on memories
• Opportunity to share stories and relive experiences with others
• Ability to build on early experiences for future growth and enjoyment

Health and energy advantage. Younger people generally have more health and energy to fully enjoy and participate in a wide range of experiences. By investing in experiences early, you can:

• Take advantage of physical abilities at their peak
• Create foundational memories that shape your life perspective
• Build a diverse portfolio of experiences to draw upon later in life

3. Aim to die with zero, spending all your money before you die

Every dollar you don't spend at the right time will have far less value to you later, and in some cases it will bring you no enjoyment at all.

Avoid wasted life energy. Working to accumulate money you never spend is a waste of your precious time and energy. By aiming to die with zero, you ensure that you're making the most of your resources during your lifetime.

Strategies for dying with zero:

• Calculate your basic survival needs for retirement
• Plan experiences and spending throughout your life, not just in retirement
• Regularly reassess your financial situation and adjust spending accordingly

Overcome saving inertia. Many people save out of habit or fear, accumulating more than they'll ever use. Recognize that oversaving can be as detrimental to your life satisfaction as undersaving. Embrace a more balanced approach to saving and spending that aligns with your life goals and values.

4. Use financial tools to manage longevity risk and die with zero

Annuities are essentially the opposite of life insurance: When you buy life insurance, you're spending money to protect your survivors against the risk that you'll die too young, whereas buying annuities protects you against the risk of dying too old (outliving your savings).

Understand longevity risk. The uncertainty of how long you'll live makes it challenging to plan your spending. Longevity risk is the possibility of outliving your savings, which leads many people to oversave as a precaution.

Financial tools to manage longevity risk:

• Life expectancy calculators to estimate your timeline
• Annuities to provide guaranteed income for life
• Long-term care insurance to cover potential healthcare costs

Optimal spending curve. By using these tools, you can create a spending plan that allows you to enjoy your money throughout your life while minimizing the risk of running out. This typically involves:

• Higher spending in early retirement when health is good
• Gradual decrease in spending as health and interests naturally decline
• Maintaining a basic level of financial security until the end of life

5. Give money to children and charity when it has the most impact

If you wait until you die to have your children inherit your money, you're leaving the outcome to chance.

Timing matters for gifts. The impact of financial gifts to children or charities is often greatest when given earlier rather than as an inheritance. Consider the recipient's age, needs, and ability to use the gift effectively.

Optimal giving strategies:

• For children: Give substantial gifts between ages 26-35, when they can responsibly use the money but still have time to benefit from it
• For charities: Donate earlier to allow organizations to put your money to work sooner and potentially have a greater impact

Living legacy. By giving while you're alive, you can:

• Witness the impact of your generosity
• Guide how the money is used
• Enjoy tax benefits in some cases
• Avoid leaving the distribution of your wealth to chance

6. Balance health, money, and time throughout your life

Your health just keeps declining from your peak years in your late teens and twenties, sometimes suddenly but usually so gradually that you don't notice it.

Three key resources. Health, money, and time are the essential components for enjoying life experiences. However, these resources are rarely in perfect balance throughout life.

Typical resource distribution:

• Youth: High health, low money, moderate free time
• Middle age: Declining health, increasing money, low free time
• Retirement: Low health, moderate money, high free time

Optimize resource allocation. To maximize life fulfillment:

• Invest in health early and consistently
• Use money to buy time when possible (e.g., outsourcing chores)
• Plan experiences that match your current health and energy levels
• Adjust your work-life balance to prioritize experiences at different life stages

7. Time-bucket your life to plan experiences at optimal ages

Unlike school years and round-trip vacations, the end points of most periods in our lives come and go without much fanfare.

Life stages have limits. Many experiences are best enjoyed or only possible at certain ages. By recognizing these limits, you can better plan to make the most of each life stage.

How to time-bucket your life:

1. Create a timeline of your life from now to your expected end
2. Divide the timeline into 5-10 year intervals
3. List key experiences you want to have in your lifetime
4. Assign each experience to the most appropriate time bucket

Avoid regrets. Time-bucketing helps you:

• Prioritize experiences before it's too late
• Recognize and seize fleeting opportunities
• Balance short-term enjoyment with long-term planning
• Adjust your financial and career decisions to support your life goals

8. Know when to stop growing your wealth and start spending

For most people, the optimal net worth peak occurs at some point between the ages of 45 and 60.

Identify your peak. Your net worth peak is the point at which you should stop accumulating wealth and start spending it down. This peak typically occurs earlier than traditional retirement age.

Factors influencing your peak:

• Health and life expectancy
• Career trajectory and earning potential
• Personal goals and desired experiences
• Family obligations and legacy plans

Shift to decumulation. Once you've reached your peak:

• Reassess your spending patterns
• Start using your savings for meaningful experiences
• Adjust your work-life balance to prioritize enjoyment over earning
• Continue to monitor and adjust your plan as circumstances change

9. Take your biggest risks when you have little to lose

At the extreme, when the downside is very low (or nonexistent, as in the "nothing to lose" case) and the upside is really high, it's actually riskier not to make the bold move.

Asymmetric risk opportunities. When you're young or have few responsibilities, the potential upside of taking risks often far outweighs the downside. Recognize and seize these opportunities for maximum life impact.

Examples of low-risk, high-reward situations:

• Pursuing a dream career in your twenties
• Starting a business before having family obligations
• Moving to a new city or country for opportunities
• Learning new skills or exploring passions early in life

Calculated boldness. As you age and accumulate responsibilities, shift your risk-taking to:

• Financial decisions (e.g., optimizing your spending for experiences)
• Personal growth opportunities with limited downside
• Calculated career moves that align with your values and goals

Remember, the risk of inaction – missing out on potential life-changing experiences – can be greater than the risk of taking bold steps toward your dreams.

Last updated: January 22, 2025